Hedonic-Loss Damages That Optimally Deter: An Alternative to “Value of a Statistical Life” That Focuses on Both Decedent and Tortfeasor

Plaintiffs in wrongful-death suits typically are unable to recover for the decedent’s “hedonic loss”—the loss of happiness (or wellbeing) incurred as a result of the lost life-years themselves. Although this omission might not be a mistake on a backward-looking account of tort law (because the decedent is dead and arguably cannot be compensated), it is problematic on a forward-looking account of tort law, because it results in under-deterrence of activities causing death. Thus, we must provide an answer to the tricky question of what dollar sum should be assigned to the loss of life. The dominant framework among legal theorists for thinking about how tort law should determine the dollar sum is the “value of a statistical life” (VSL). In this Article, however, I argue that the VSL approach is mistaken. I explain why, propose an alternative, and explore the wide-ranging implications of my analysis.

If we are to provide a monetary remedy for the decedent’s lost happiness, we need to translate the lost happiness into a monetary sum. The VSL approach does so on the decedent’s “utility curve,” thus taking the decedent’s wealth into account in determining the damages sum, with the potential tortfeasor then internalizing this monetary cost. This is a mistake. For the incentives to be optimal, we want the potential tortfeasor to instead internalize the amount of happiness loss that would be incurred by the decedent. Therefore, my account carries out the happiness-to- money translation on the potential tortfeasor’s “utility curve”—thus taking into account the potential tortfeasor’s wealth and not the decedent’s wealth.

The implications of my analysis extend beyond the context of wrongful death, providing us with important insights about tort law more generally, and, more generally still, about law on the whole. In particular, my analysis casts doubt on foundational assumptions underlying the law- and-economics literature—simultaneously providing a new framework that law-and-economics theorists should employ.